Employees Sue for Birth Control Coverage

The proverbial last straw snapped for Jackie Fitzgerald when she found herself short of cash and debating whether to fill her car's fuel tank or her birth control prescription in 2001.

Fitzgerald, a trainman for Union Pacific Railroad Co. (UP), spent her last $40 to buy gas to get to work, a decision that led to an unplanned pregnancy.

"She was very upset that not only did her health plan not cover contraception, but ... she knew from the guys at her work that they got all the Rogaine and Viagra that they needed, " recalls Roberta Riley, staff attorney for Planned Parenthood of Western Washington. "She felt it was very discriminatory against women."

Backed by Planned Parenthood, Fitzgerald and representative plaintiffs Brandi Standridge of Idaho and Kenya Phillips of Missouri launched a federal class action against UP in 2003.

The plaintiffs contend that the company's refusal to pay for non- "medically necessary " prescription contraceptives while covering many other preventive prescription drugs was sex discrimination against the company's 450 unionized female employees of child-bearing-age.

In 2005 Nebraska's District Court agreed with the plaintiffs that UP's contraception exclusion violated Title VII and the Pregnancy Discrimination Act (PDA). UP appealed to the 8th Circuit, arguing that the District Court overstepped its authority and its ruling will impose "huge" burdens on businesses.

If upheld, Judge Laurie Smith Camp's interpretation of the federal anti-discrimination law will affect thousands of companies and workers, suggests Donald J. Munro, a partner at Goodwin Procter, who represented UP in its appeal.

Judicial Micromanagement

Beyond the concern that forcing employers to cover contraceptives will be costly, the ruling raises a second and perhaps more serious implication.

"[The decision creates] the potential for creeping judicial micromanagement of benefit plans," Munro says. "You could have a world in which employers find that they are obligated to provide coverage for the ever-increasing array of gender-specific ?? 1/2 prescription drugs."

Exclusions for medical conditions that might afflict one racial group more than another might also be in jeopardy, suggests David Weinstein, chairman of Wildman Harrold's employment and labor practice in Chicago. "It's scary for employers because of what could end up being enormous costs."

Forcing employers to cover contraceptives could even result in some employees losing their health benefits altogether as companies faced with increasing premiums opt not to provide prescription drug benefits, warns the U.S. Chamber of Commerce, which filed an amicus brief in support of UP. However, according to a report by the Guttmacher Institute, which studies reproductive health issues, 90 percent of employer health plans that cover prescription drugs already cover prescription contraceptives.

Still, the 8th Circuit's judgment, expected in early 2007, will reverberate nationally as the first appellate pronouncement on whether prescription drug plans that exclude prescription birth control violate Title VII and the PDA.

The Circuit court's decision will turn on its interpretation of Title VII. UP urges on appeal that "the overriding command" of Title VII is to treat men and women "the same," and argues that denying contraceptive coverage to all employees satisfies that standard. Plus, UP points out that it already spends more on health coverage for women than it does for men. Planned Parenthood counters that because only females can get pregnant, giving women and men the same coverage is discriminatory.

That was the argument that swayed the district court. Judge Camp held that UP's prescription drug plans violate Title VII because they treat the medical care women need to prevent pregnancy less favorably than the medical care needed to prevent other, less serious health conditions, such as erectile dysfunction.

"While Union Pacific may incur some net increase in cost if prescription contraceptives are covered under the Plans, such costs cannot justify discrimination under Title VII or the PDA," Camp noted.

'Far-reaching' Consequences

Despite the certainty of the district court decision, the 8th Circuit's ruling is difficult to predict, Weinstein suggests. "The 8th Circuit has never been a particularly liberal circuit," he says. "At the same time this presents them with a case they could approach from any number of angles."

Win or lose, the writing could be on the wall. Recent changes to the collectively bargained health care plans of the major railroads, including UP, have added benefits for FDA-approved contraceptive drugs and devices, starting Jan. 1, 2006. But UP's appeal will still determine whether the Omaha-based company has to reimburse employees for their past birth control expenditures and pay the plaintiffs' attorneys fees.

Nor is the 8th Circuit likely to get the last word. Alice Ballard, a labor-side lawyer, anticipates "if the Court of Appeals reverses this decision ... the Supreme Court would grant certiorari on the issue because of its overall importance."

A thumbs-down from the bench also could galvanize the new Congress to reconsider a 1997 bill that would require insurance carriers to cover contraceptives if they cover other drugs. The Equity in Prescription Insurance and Contraceptive Coverage Act of 2005 stalled before committees of both Houses in 2006.

"If the 8th Circuit reverses, I think there is no question that women will be expecting Congress to make it right and fair," Riley says . "It's not like we are asking for the moon here."